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"Because the U.S. has, relative to its 'AAA' peers, what we consider to be very large budget deficits and rising government indebtedness and the path to addressing these is not clear to us, we have revised our outlook on the long-term rating to negative from stable," the agency said in a statement.

If large U.S. budget deficits and rising government indebtedness are news to you, then you shouldn't be making investment decisions. A smart investor doesn't need to wait for S&P to figure out that the U.S. government has a huge problem—that problem has been obvious for at least the past two years. What is amazing is that the market today had a negative reaction to the S&P announcement of the obvious. That sounds like a buying opportunity to me.

Ratings agencies rarely are the first to uncover important changes to the fundamentals behind a security or a country. More often than not, they are the last ones to figure out what is going on. Smart investors need to understand and react to changing fundamentals long before they are revealed in a rating agency press release. Ratings agencies cannot pay enough to hire staff smart enough to routinely beat the market.

The irony of today's announcement is that we are not on the cusp of some new and serious deterioration in the fiscal fundamentals of the U.S. economy. On the contrary, we are now on the cusp of what could prove to be a new and very positive trend in the fiscal fundamentals. For the first time in many years, Congress seems finally aware that it must make some serious attempt to cut spending. If the analysts at S&P were on top of their game, they would have upgraded the outlook for the U.S. today.